Government borrowing narrows after EU rebate

Britain’s budget deficit narrowed by half in December 2017, helped by large rebate from the European Union. The UK had received a £1.2bn rebate due to a reduction in the bloc’s budget and changes to contributions.

According to the Office for National Statistics (ONS) today, the deficit in December was £2.6bn, compared to £5.1bn in December 2016. This was below analysts’ expectations of £5bn for the month.

Today’s ONS data will help finance minister Philip Hammond as he tries to cut public debt and prepare the world’s sixth-biggest economy for any shocks as Britain leaves the EU.

A Treasury spokesman said: “We have made great progress in reducing the deficit by three quarters since 2010, but government debt is still far too high.

“Our balanced approach to government spending is getting debt falling, while investing in key public services and keeping taxes low.”

The Office for Budget Responsibility told Reuters: “It appears that the underlying improvement in borrowing so far this year is a little faster than would be consistent with our November forecast,” it said.